(MENAFN- ProactiveInvestors - UK) 'It's a serious discovery,' says Bill Humphries of Landore Resources Limited (LON:LND).
He's talking about the BAM East gold prospect at the company's long-held Junior Lake property in Ontario.
Landore has been on the ground at Junior Lake for many years now and along the way has proved up nickel mineralisation in serious quantities at two separate deposits, B4-7 and the VW.
But the story of the discovery of the gold mineralisation at BAM East, just 2,000 metres to the east of B4-7 is the stuff of mining fairy tale.
At the end of last year, with the worst mining bear market in recent memory still wreaking havoc on junior miners, and with the nickel price especially hard hit, Landore getting ready to give up on the drill bit altogether, or at least for the foreseeable future.
At that stage it was one of only two junior miners still doing any drilling work at all in Ontario which, considering Ontario is one of the great mining jurisdictions in the world is quite something to consider.
But, with the nickel drilling wrapping up before Christmas, there was time for one last hole. And this one hit something different, and wholly unexpected – gold, in significant quantities.
Anyone curious about the significance of this last and apparently final drill hit need only take a look at Landore's share price performance since then.
Late in January Landore hit a 10-year low of 0.51p. There was a little bit of upward drift through February and March as the mining markets in general showed renewed signs of life, but then in early April the shares suddenly leapt to just under 2p. That was when the company put out its first significant notification on the potential of BAM East.
Several more have followed as, needless to say, drilling wasn't halted after all. The shares are now at 3.3p, up more than six times since that January low, and although there's a lot of retail on the register now, there could be more to come.
Bill Humphries is under no illusions as to the significance of the discovery at BAM East. It's not just his own long-years of experience in the mining industry, and in particular as one of the founders of Brancote Resources, the Aim market's first great mining success stories.
It's also that other parties are beginning to show an interest in BAM too.
'We've got a lot of people talking to us,' he says. 'After we finished the first round of drilling we had people calling straight away.'
There are many reasons for that. The first, straightforwardly enough, are the grades and widths. The initial announcement of the gold mineralisation at BAM East was certainly a head turner: 40.75 metres at 1.82 grams per tonne gold, with two higher grade sections of 2.25 metres at 10.28 grams per tonne and 3 metres at 5.74 grams.
When drilling resumed later in the summer, Landore then hit 38.5 metres at 3.42 grams per tonne, with additional higher grade intercepts.
By early September the company was reporting multiple instances of visible gold and more lengthy intercepts as the outcome of the summer campaign.
Winter drilling is just getting underway now, and already the project has advanced to the stage where Humphries is talking about putting out a resource in January.
'At that point I'm confident we will be in a position to do a pre-feasibility study,' he says.
'It's such a simple occurrence. This will be very easy to fast-track, because we've done all the work we need to move forward for the nickel lease. We've got permits to construct and we've got very supportive First Nations. We've done water studies, we've done wildlife, fishing – all of those.'
What's more, when the nickel price finally does move off its current 25-year lows, the economies of scale will suddenly become plain for both projects.
'It's the same sort of system,' says Humphries. 'The crushing and milling side of things will be the same. And we'll move on the nickel the moment the price moves up, and it doesn't have to move up that far.'
No doubt about it though, the gold has been transformational for Junior Lake, and for Landore.
There's a dearth of new gold projects out there and still plenty of mid-tiers and majors looking to replenish reserves. It doesn't take a complicated analyst's model to join up those dots.
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